Essays On Fiscalisation Of Land In China

Based on literature review and the theoretical analysis by comprehensive use of various methods and econometric methodology, the thesis focuses on the study of fiscalisation of land which is a unique phenomenon of Chinese local government off-budget revenue mainly on requisition land "in the public interest ". Full main attempts to answer the following four questions:(1) a clear concept, extension and characteristics of fiscalisation of land is defined. And different scales of fiscalisation of land are estimated.(2) a theoretical model based on principal-agent theory is set up to explain the birth mechanism of fiscalisation of land. As a further study, the paper exploits the spatial yardstick competition effects and its expenditure efficiency effects of fiscalisation of land among provincial level regions.(3) the relationship between fiscalisation of land and macro-economic growth, urbanization, and real estate development is analyst respective through tests and models.(4) based on the analysis of financial difficulties of land and its future development trends, the thesis gives its corresponding recommendations on the management of fiscalisation of land.First, this paper studies the concept, extension, sizes, and operation mechanism of fiscalisation of land. Since major reforms initiates by the central government beginning in1994and continuing through2002centralized control over fiscal revenue, local governments have been squeezed by a widening gap between available revenues and expenditure needs. Local governments especially in county or city level, however, have to exploit increasing land values to generate revenues to close this fiscal gap. Government land requisitions for real estate and industrial development make up of the most important source of on-budget and off-budget revenue. This unique phenomenon in China is called fiscalisation of land. According to the size of its different extension, fiscalisation of land can be divided into large, medium and small caliber. The paper calculates the size of three calibers of fiscalisation of land and finds that the development degree of fiscalisation of land has a positive relationship to the development of regions'economic. Chinese local government financial operation mechanism of the land has been formed, and there are different modes in different regions.Second, the thesis undergoes a more systematic study of fiscalisation of land, its financial system and behaviors of different agents. The1994tax reform collapse the "corporate finance" basis of local governments', as a result of the "revenue powers" and "business rights" not matching, and finally induced the birth and development of fiscalisation of land. China's current land ownership system also opens its "door" to fiscalisation of land. The centralized governance structure which local governments are responsible for the upper level governments in turns, revenue and the "city management" and the chasing for GDP become the benchmark of regional competition, further make fiscalisation of land bigger and stronger. Through the establishment of a model based on principal-agent theory, the paper analyses the optimization revenue behavior of the local government's under the sharing tax system, and finds that, by adding the factors of fiscalisation of land, the local government's revenue increases and risk reduces, while the agency costs of central government decrease. So by adding fiscalisation of land is to help the implementation of the sharing tax system. Non-cooperative game strategy among the local governments in the land is the best strategy. There is spatial yardstick competition effect on fiscalisation of land among the different provinces. To a certain extent, fiscalisation of land affects the expenditure effectiveness of local government finance, but there is uncertainty on the relationship among different regions.Third, the material basis of fiscalisation of land is land which is transferred from agriculture to industry and commerce, and as a basic factor of production, it is a source of economic development and has a positive impact on the economy. Based on C-D production function, the thesis derives the economic contribution of fiscalisation of land. On the static panel model, the paper finds that fiscalisation of land with current and lagged two has positive effects on economic growth. There is also a positive relationship between fiscalisation of land and economic growth in the East, Middle and West. There are also positive relationships between fiscalisation of land corresponding to secondary and tertiary industries and the growth of respective value-added in the above three regions. On the DEA technique, the paper gets the scores of respective competitiveness of secondary and tertiary industries', then the paper analyses the effects of fiscalisation of land on secondary and tertiary industries, and finds that fiscalisation of land has a near-zero positive effect on competitiveness of both secondary and tertiary industries, but the coefficient of tertiary industry is less than secondary industry's at the same period. And this result also reflects the fact that revenue of the third industrial land the role of direct investment is less than the role of fiscalisation of land directly investment in tertiary industries is less that in the second industries at the same period. Empirical studies have found that the rate of urbanization has a greater positive effect on fiscalisation of land. There are positive relationship and lagging the positive effects between real estate value-added and fiscalisation of land. Through the system GMM test, it can be seen that the local government financial dependence on the land boosts house prices and land prices respectively. From the population structure, urbanization development and the final size of plantation, the paper devises a program and measures the size of fiscalisation of land from2012-2020. Fiscalisation of land, as rent income, will be long-term, sustainable and no death, but the large-scale of fiscalisation of land might be replaced by property taxes or other new fees. Fiscalisation of land eventually returning to its rightful place is historical necessity. Finally, this thesis gives countermeasures to the management of fiscalisation of land. We must push the reforms in local level governments through deregulation, and improving the evaluation mechanism of local government performance, and further optimizing the governance structure. Another measure we should take is to reconstruction of the system through fiscal decentralization, which requires the optimization of central and local government interest pattern. The third one is to improve the innovation system of land ownership and land use rights to protect land owners.